Security for Sale

Finland has a long history of conflict with Russia, but for much of the last two decades, the country welcomed investment from its eastern neighbor, in part because it hoped that closer economic ties would encourage its transition to democracy, and reduce the threat of conflict. The 2022 full-scale invasion of Ukraine definitively changed the calculus, leaving the Finnish government to confront the thousands of Russian-owned properties spread across the country — not just as an awkward relic of its past policies, but as a potential national security risk.

While many of the Russian transactions in Finland were simple purchases of homes, holiday properties or investment assets, others have raised concerns — land close to military bases, airfields and weapons depots, telecoms, water, power and transport infrastructure or strategic areas close to the border. In some cases, the sites have been equipped with helicopter landing pads, defensive structures and landing docks.

Bloomberg spoke with more than a dozen people with knowledge of Finland’s security architecture, who all expressed alarm about Russian-owned properties. One, speaking on condition of anonymity to discuss sensitive matters, told Bloomberg that the government is worried that some of these sites could be used to spy on military facilities and to stage “accidents” that disrupt transport and information infrastructure.

“In peacetime, properties can appear harmless until the moment they are activated,” Defense Minister Antti Häkkänen said, adding that in Ukraine, the Finnish government observed that Russian-owned property was used for intelligence gathering, sabotage and pre-positioning of military supplies. Häkkänen worries that the same scenario could occur in Finland. “When military tensions begin to rise, networks are cut, strange things start happening on properties and acts of sabotage occur, it is already too late to start closing the gaps,” he said.

In 2020, Finland changed the law, so that non-EU or EEA citizens needed to get permission from the Ministry of Defense to buy property in the country. The Kankaanpää nursing home was the first real estate transaction that the country blocked on national security grounds.

According to the Ministry of Defense, a property’s risk is assessed based on whether it’s in an area that could have significance for Finland’s national security, and the buyer’s background and motivation. Transactions are vetted by several agencies, with authorities looking for patterns and “weak signals” — subtle or ambiguous hints that make officials suspicious, according to a source with knowledge of the situation, who spoke on condition of anonymity to discuss matters of national security.

For some applications located close to infrastructure or military facilities, the government does not list their proximity as the main reason for the rejection. Sometimes buyers fail to complete the process when the authorities ask for more information, leading to an automatic refusal.

The old vicarage in Kolkanniemi, near Saarijärvi in central Finland, is a site of deep cultural and historical significance. According to local lore, Finland’s national poet, Johan Ludvig Runeberg, wrote the verses praising the country’s lakes and forests that became the lyrics of the national anthem while standing in the vicarage yard, gazing out over the surrounding landscape. Today, the building is owned by former Nokia director Oiva Miettinen and his wife.

On the wall of Miettinen’s study hangs a large map of Finland, dotted with pins. More than a decade before the full-scale invasion of Ukraine — even before the illegal annexation of Crimea in 2014 — he and three colleagues had begun to track land deals coming out of Russia.

It all began in the summer of 2008. Kalevi Kuorelahti, who had held senior roles in the international energy industry, was on holiday in Saarijärvi when he read a story in local newspaper Sampo while sitting in a pub. The report said that Russian businessman, Denis Fokin, had promised to invest €100 million in the municipality.

Russian and Finnish media have reported that Fokin was close to senior figures in the Kremlin in the 1990s and 2000s, which he has previously denied. Fokin did not respond to requests for comment sent to his company email address.

Kuorelahti voiced his skepticism out loud — why would anyone spend that much money to get a plot in the middle of nowhere, in a municipality with fewer than 10,000 residents. The pub’s owner overheard him and urged him to get in touch with other opponents of the project, including local police officer Asko Hackzell, retired Brigadier General Hannu Luotola, and Miettinen.

“What motivated us was patriotism,” Luotola said in an interview. “We don’t want to sell a single acre to Russians, land our fathers and grandfathers defended in the war and the Russians failed to seize.”

The Soviet Union invaded Finland in 1939, and Finland fought two wars against it. Under the peace terms, Finland was forced to cede roughly 10% of its territory to the Soviet Union and pay substantial war reparations.

The Saarijärvi project ultimately didn’t go ahead, although Fokin still ended up with three parcels of land in the area. However, the four men’s campaign drew media attention. Soon, tips about Russian-owned properties began to arrive from across the country — from construction contractors, timber merchants, taxi drivers and small business owners, who sometimes reached out after buyers of land hadn’t paid them for work. Many of the leads went directly to Hackzell, who died in 2017.

Kuorelahti became the group’s field investigator. He traveled to every airport in Finland, finding Russian-owned properties next to runways and approach paths, including military sites at Kuopio and Kuorevesi in central Finland. Next, he began photographing properties near electricity transmission infrastructure and Finnish Defense Forces weapons depots.

“I paid particular attention to locations where several strategic assets converged, such as railways, high-voltage power lines and major highways,” Kuorelahti said. “In those places, Russian ownership appeared with striking frequency.”

Threats and harassment began not long after they started their investigations, the men said. The targeting intensified between 2013 and 2015.

The tires of Hackzell’s car were slashed many times, his wife told Bloomberg. When he went grocery shopping with his wife, he avoided parking anywhere isolated. When he spoke on the phone, he could hear a distant clicking sound, which he suspected meant it was being tapped. A hare’s head was left on the steps of his home. A van he had rented from a car rental company was found with its left wheel nearly detached.

Kuorelahti received a mafia-style threat of physical violence if the work continued, posted on a website where Russian companies suspected of the transactions were discussed by name. “You’re asking for blood,” the message read, in ungrammatical Finnish. “We will find you.”

For years, the group wrote opinion pieces for Finnish newspapers and briefed politicians and journalists about their findings, but there was little response from officials, they said. In 2010, senior defense ministry officials publicly dismissed the idea foreign-owned properties could pose a security risk.

When Finland joined the European Union in 1995, it chose to exempt non-EU and non-European Economic Area citizens from the requirement to get permits when buying properties, allowing Russians to freely invest in the country. Few politicians were willing to openly question the policy, according to Jussi Niinistö, who was defense minister between 2015 and 2019.

“There were certain topics it wasn’t advisable to talk about publicly, Russia among them, because people wanted to believe the best,” Niinistö said in an interview. “Banning property purchases was seen as something that could potentially risk relations between Finland and Russia.”

In 2014, when Russia illegally annexed Crimea, “our eyes began to open toward what Russia was really up to,” said Niinistö, who was elected to parliament in 2011 as a member of the populist The Finns Party, and chaired the defense committee before becoming defense minister. He is now city manager of Kannus, a town in western Finland.

He said that after receiving information from the volunteers, he passed it on to the Finnish Defense Forces’ intelligence unit.

The government ultimately included the issue in its formal list of policy goals in 2015, Niinistö said. But even as it began to acknowledge the scale of the problem, the government still lacked powers to tackle it.

In September 2018, hundreds of police descended on properties on the Finnish mainland and on islands off the coast near the southwestern city of Turku and nearby town of Naantali, searching assets owned by a real estate company, Airiston Helmi — whose name loosely translates as “Pearl of the Archipelago.”

The company, majority owned by the Russian businessman Pavel Melnikov, had accumulated islands and 14 shoreline properties, close to the Åland Islands, a critical maritime gateway, as well as shipping lanes and subsea data cables. The company said that they were part of a tourist business, but the authorities were concerned that the owners had constructed reinforced concrete docks and helicopter landing pads.

The raids were part of an investigation into alleged money laundering and other financial crimes, not a national security operation.

But Niinistö, who was defense minister at the time, said that approach was chosen because it was the only legal way Finland could begin a formal probe. “Even though there were suspicions of security risks, there were no tools to act on that, and we had to proceed through financial crimes,” he said.

During the searches, In addition to a large amount of cash police seized, surveillance equipment, osmosis equipment for purifying water, a high volume of high-security data storage and transmission capacity, as well as diving equipment capable of reaching depths of up to 40 meters, according to a statement by the Ministry of Defense.

In a statement to Bloomberg News, Melnikov’s legal representative Kai Kotiranta said that the idea that the properties constituted a security risk “mostly reflects media speculation and rumours.” He disputed that the structures on the island were reinforced.

“In reality, these were ordinary piers/berths, several private helipads used for winter access (the owner’s helicopter was legally registered), and standard Finnish-design smoke sauna buildings,” he said. “Not military-capable infrastructure.” Construction of the buildings on the island were coordinated with the local authorities and subject to inspection by the government, he added.

Airiston Helmi’s properties were a real tourism business, Kotiranta said, and had been used for corporate retreats and booked by private tourists. “Video surveillance was needed on the island solely due to its remoteness,” he said. “The diving equipment was purely recreational and had no connection to the case whatsoever.”

The desalination unit was installed “because there are no other ways to obtain fresh water necessary to supply the buildings on the island,” Kotiranta said.

Melnikov was later convicted of value added tax fraud and accounting offenses and sentenced to 18 months of suspended imprisonment. He is appealing the judgement, Kotiranta said.

Before 2022, it was rare for anyone in the Finnish establishment to openly talk about the threat posed by its eastern neighbor. Security is rarely discussed in public in any detail, for fear of Russia learning too much about Finland’s capabilities and gaps in its defenses.

It was only after the Kremlin launched its full-scale invasion of Ukraine that Finland named Russia as a security threat. Soon after, the government made amendments to the law completely banning citizens of countries which had “violated the territorial integrity, sovereignty and independence of another state and could threaten Finland’s security” — meaning Russia and Belarus — from buying property unless they hold a permanent Finnish or long-term EU residence permit. The law entered into force in 2025.

“There is nothing against dual citizens or Russians as individuals, but rather it is against the operating methods of the Russian administration,” Häkkänen, the defense minister, said.

Häkkänen said that Russia has long used so-called “hybrid” tactics to intimidate and destabilize other countries, including propaganda and influence operations, and the use of irregular migrants, which Finland, Poland and the Baltic states allege have been sent in large numbers to their borders by the Kremlin and its ally, Belarus. Acquiring property could well be part of that hybrid campaign.

“It looks completely legal or innocent at first, but in reality achieves the effect that is wanted, namely destabilization, chaos, even harming national defense or harming the functioning of an alliance,” Häkkänen said.

The Russian embassy in Helsinki did not respond to requests for comment.

The fact that the government is now openly talking about Russian-owned properties — given how reluctant the authorities can be in Finland about discussing security — is a measure of how much attention they’re giving the issue. “Public debate has been rather frank on how such properties could be used in sort of grey-zone influencing operations,” said Matti Pesu, senior research fellow at the Finnish Institute of International Affairs. “I’d take it seriously.”

The source with knowledge of security concerns told Bloomberg that some Russian buyers are creative in trying to exploit loopholes in the system, and that familiar names turn up during investigations as the same individuals attempt to get around the rules.

If a buyer has dual Finnish-Russian citizenship, or purchases a property jointly with a cohabiting partner who is an EU or EEA citizen, they don’t need a permit. Russians can also buy shares in residential apartments, lease land, or use corporate structures or frontmen. One lawyer specializing in property transactions, who asked not to be named because of the sensitivity of the issue, said the rules are easy to bypass and it is naïve to think that the problem has been resolved.

Defense Minister Häkkänen said the most obvious threat scenarios have now been addressed. “The situation in which an oligarch from St Petersburg, or a person who is outside the monitoring of our security authorities, could buy large property complexes near critical areas has now been blocked,” he said.

A steady metallic rumble fills the air at Vuosaari Port in Helsinki. Container cranes work at a relentless pace, trucks and fuel tankers roll in and out, some collecting cargo, others delivering it to an Eckerö Line vessel waiting to depart for Muuga, Estonia. At the railyard, a locomotive stands by with its headlights on.

Vuosaari is Finland’s most important logistics hub, key to its economy, security of supply, and its defense. The country’s supply lines to its NATO allies are almost entirely by sea. At a time of crisis or conflict, the port would be the main artery through which medicines, food, military equipment and wounded soldiers and civilians would move. Thirty-five kilometers to the east lies Finland’s only oil refinery, 20 kilometers away is the country’s largest airport, Helsinki-Vantaa.

In the shipping lane just outside the port sits the island of Mölandet. Midway along it, almost directly opposite the quays, is a piece of real estate that is causing considerable alarm in Finland’s security services, according to people with knowledge of the situation who did not want to be named as they were discussing sensitive information. Satellite images of the island show a dense forest, small docks and a clearing with a few buildings. It’s owned by a company called Kiinteistö Oy Villa August, whose beneficial owners are the Russian businessman Konstantin Sukhin, and Denis Fokin.

Sukhin did not respond to requests for comment.

Even though restrictions have been put in place on new purchases, Finnish authorities need to look into properties that have already been sold. Officials can seize a property if they have evidence of activity that threatens national security.

“You could assume there are no radical negative impacts on security given authorities haven’t used the rights they have under current law to buy or otherwise obtain those properties,” Pesu, from the Finnish Institute of International Affairs, said. “They also need to weigh legislation protecting of property rights and cost.”

Teemu Liikkanen, head of the counterintelligence department at the Finnish Security and Intelligence Service, said the properties owned by Russians do not pose an immediate threat to national security. “But the risks are there.” The key question, he added, is how such sites could be used if the security situation were to deteriorate.

“When, for example, the war in Ukraine ends, where will actions be directed after that?” he said, referencing fears that a peace deal in Ukraine that empowers Russia could result in the Kremlin stepping up its aggression against the rest of Europe.

There are so many sites to assess, Jaakko Christensen, head of intelligence department at the National Bureau of Investigation, said, that “it is impossible to comprehensively monitor all the properties and property transactions.”

Police are particularly focused on real estate located near critical infrastructure including police facilities, which could be used for intelligence-gathering, as well as sites that may be used to manufacture or store goods subject to sanctions or to house people staying in the country illegally, Christensen said.

One site the defense ministry has publicly confirmed to be monitoring is Kotasaari — a more than 20-hectare property on an island along Finland’s most important inland waterway. It includes large buildings, along with a helicopter landing area protected by high embankments. The landing area can only be seen from above.

In Finnish media, military experts have said that the property has military-grade reinforced structures. The owner is Russian businessman Igor Kesaev, who has been reported in the Finnish and Russian media as heading a foundation, Monolit, which supports current and former staff of the country’s intelligence services, the FSB, and their families. Kesaev did not respond to requests for comment.

In the study of the Kolkanniemi vicarage, civilians Hannu Luotola, Oiva Miettinen and Kalevi Kuorelahti sat around a desk crowded with maps and stacks of documents accumulated over years of work. All are now in their eighties. When the tightened laws took effect, they did not pause to mark the moment. They want the remaining workarounds — dual citizenship, leasing, and the use of companies and proxy buyers — to be made harder, for there to be more enforcement of anti-money laundering rules, and more severe consequences for people who break the rules.

“If a property acquisition involves illegal activity, systematic circumvention of the law, or a threat to state security, the instrument of the crime should be subject to forfeiture to the state,” Luotola said. He and his colleagues want the government to speed up its reviews and to act more decisively. “But Finland’s legislation changes slowly,” he said, as he began emailing another opinion piece he has written to a national newspaper.